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Flood Insurance for Dummies

Flood Insurance Basics – the 5 minute Guide

Most folks buy Flood Insurance because their banks tells them it’s required to get a mortgage. Banks are required by FEMA to demand Flood Insurance on all mortgaged structures in a flood hazard zone. You need more info, here is some you may find helpful. Your insurance agent can answer more questions as you raise them.

Rating for Flood premiums is done by locating your property on flood maps. FEMA has designated Flood Hazard Zones to define property at risk of flood loss. It is based on elevation above sea level. The most likely to flood is low, the least likely is high. Most people think that because they buy a house on the water they will be required to buy Flood Insurance. Not true, only if your house is low.

Less than an 8′ elevation is low on the creek and bay; on the Sound, low may be 10′-15′! You can see your property on the FEMA websitewww.fema.gov/hazard/flood. Here, you can enter your address and pull up the map showing your location and see the flood zones around your property. This tells you what FEMA says should be the lowest floor elevation of your house. If you see A-4 you will see an (8) under it. That means the lowest floor should be at 8′. If it is that or higher, your insurance won’t be too expensive. If it is less, you will pay more for flood insurance because your home is more likely to be flooded. There are other flood zones as well. Zone X indicates property higher than 8′ and thus not in a special hazard flood zone. If you look at a map showing property on the Sound, you will see V zones with 15′ or 13′ required lowest floors. Even A zones near the sound may require 11′.

You will note that the flood map doesn’t show house locations or property lines, so it is up to you to figure out exactly what zone your house is in, and then, what the elevation of your lowest floor is, to determine your flood insurance rate. Your surveyor can determine this for you. Often a bank will buy a “flood search” as a part of your mortgage application process, but that search usually only determines whether or not the property lines of your lot fall within a flood zone, not the location of your house! Consider the Horton’s Pt. Lighthouse, for example. A flood search will show that property to be in a flood zone. Why? Because the property runs from mean high water on the Sound, back landward a hundred feet or more. The structure to be mortgaged and insured happens to be about 80′ or more above a flood zone! Most property is not level, it usually runs down to the water, and the house is built on the high ground. If it is built on a elevation higher than 8′ (or whatever is required in that zone) you don’t have to buy flood insurance: you’re not in a flood hazard zone. There are many folks who buy flood insurance who may not need it because of this search that only tells that the property and not the house is in a flood zone!

In summation, the flood map tells you what flood hazard zone your property is in, and what elevation is required. Your survey, if it is not readily apparent from the map, will tell your specifically the elevation,(and therefore the flood zone) and the elevation of your lowest floor. Those two items are what is required to determine your flood insurance premium. If your are considering new construction in a flood zone, you will find that the higher your lowest floor, the lower your insurance premium, so build as high as is practical. One more thing:FEMA rounds elevation to the nearest foot so 8.6′ rates at 9′.

Next installment: What is Flood? What is covered by Flood Insurance? Any reason to buy it if I am not in a flood special hazard zone?
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